Bond payments are generally more predictable than stocks because
A) interest on bonds is not taxable.
B) stock prices and dividends exhibit little volatility.
C) bonds generate higher average rates of return.
D) bond owners know the size and timing of payments they will receive.

Question

Quizplus · Accepted Answer

Bond owners know the size and timing of payments they will receive, making bond payments more predictable than stocks. The other options are not true - interest on bonds is taxable, stock prices and dividends exhibit high volatility, and bonds generally have lower average rates of return than stocks.

Bond Payments Are Generally More Predictable Than Stocks Because